It’s no secret the UK has chronic productivity pains. Comparing the dozen years before versus after the global financial crisis, annual productivity growth has fallen from 2.5% to 0.5%.
In fact the true extent of the current problem is unclear, as the Office for National Statistics is working to fix its faulty labour force survey. It recently revised upwards the estimated number of people in employment, so it may be the case that growth in worker productivity is even lower than previously thought. In its November 2024 report Get Britain’s Stats Working, the Resolution Foundation thinktank warns it’s possible there may have been no UK productivity growth at all since 2019.
They want to make sure they get that fifth day off
Whatever the macro picture, there’s a consensus that companies must look for smart ways to solve their own productivity puzzles, such as championing flexible working or trialling shorter working weeks.
Four-day here to stay?
The UK’s first four-day working week pilot in 2022 enjoyed some success. Of the 61 companies that took part, 92% continued beyond the trial’s end, with the vast majority satisfied that business performance and productivity had been maintained. A large proportion (71%) of the 2,900 employees involved reported lower levels of burnout, and there was a 65% reduction in sick days.
Watching that pilot with interest was Cardiff-based Barcud Shared Services, now one year into a trial of its own, where its 15 staff work 80% of the time with no drop in salary.
‘The more flexibility you give people, the more they’ll give you in return’
Productivity has increased by up to 15%, team morale is up by a fifth, clients are reporting higher levels of satisfaction, and job vacancies are easier to fill. ‘We’re still looking at the KPIs, but it’s here to stay,’ says Tom Wilkinson, group operations director.
He attributes productivity gains to staff being protective of their four-day week. Some are saving on childcare costs; others do household chores to maximise quality time with their families on weekends.
‘They want to make sure they get that fifth day off,’ says Wilkinson. ‘It’s never a guarantee, though, as they’re still technically employed on a five-day working contract.’
Added focus
With this incentive, staff are alert to time drains – for example, in meetings people curtail chit chat and get straight down to business, Wilkinson says. Organisational inefficiencies are thrown into stark relief when time is short, forcing people to make fast decisions about where their skills are best directed. This hyper-efficient attitude means those below director level almost always get their non-working day off, while directors, on average, get one in every five, according to Wilkinson.
Location, location, location
What many leaders cannot seem to agree on is whether the location that we work from has an impact on worker productivity. ONS data paints a picture of what working arrangements looked like in October 2024, when 44% of working adults travelled to a fixed location such as an office, while a similar proportion either worked in a hybrid pattern (28%) – partly from home, partly from a workplace – or solely from home (13%).
Increasingly, people are being mandated to return to offices by bosses pushing to curb remote working. Elon Musk, for example, has said he is ‘a big believer that people are more productive when they’re in person’. But those who believe efficiency is the preserve of office-based work seem to be wilfully ignoring a range of findings to the contrary.
There was no evidence to show hybrid working affected promotions or performance
Take research by Stanford economics professor Nicholas Bloom published in June 2024. Over six months, more than 1,600 employees in a large Chinese technology company were studied, having been split into two groups: working from home on Wednesday and Friday, and from the office on the other three days; or working from the office full-time.
There was neither evidence to show hybrid working affected promotions or performance, nor that it affected the lines of code written by computer-engineer employees. The 395 managers who took part revised their views about the effects of hybrid working on productivity, from a perceived negative effect before the experiment to a perceived positive one after.
Hybrid working also slashed quit rates by a third, an effect that was especially significant among female workers, non-managers and those with lengthy commutes.
Flexibility pays off
This tallies with the experience of Cécile Parker FCCA who, in her three years as CFO of Vital Energi, has been flying the hybrid flag. Although the company’s policy already allows its 750-plus employees to work from home one day a week, Parker would like to see greater flexibility.
‘It’s still a difficult process to try and get people to acknowledge you don’t need to have everybody in one place all the time to be efficient,’ she says. ‘But I believe the more flexibility you give people, the more they’ll give you in return – and my team has not let me down once.’
Success hinges on hiring the right people and possessing the right management style
Unlike the rest of the company, the finance team Parker leads works from home two days a week and travels to headquarters in Blackburn three days a week. She reports lower-than-average sick days, their employee engagement score is the highest in the company, and they’ve never yet missed a deadline.
Parker says success hinges on hiring the right people and possessing the right management style. ‘I’m not micro-managing people and I’m not Big Brother, but if I can’t get hold of somebody who’s working from home or if someone were to miss a deadline, then that’s going to be an issue,’ she says.
Hybrid workers spend an average 24 minutes more on sleep and rest and 15 minutes more on exercise, sports and tending to their wellbeing on their work-from-home days, according to the ONS. So it’s no surprise that a quarter of those working from a fixed location cite it as a contributing factor to burnout, compared to 19% of field-based workers, 16% of home workers and just 14% of hybrid or agile workers, according to Mental Health UK research.
These pioneers of productivity aren’t altruists – they’re also thinking about business success and bottom lines – but if everyone benefits, then it’s surely worth considering.
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